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MR. FORMAL BUILDING1205 SE Grand Ave / 1206 SE MLK Blvd

Portland, OR 97214

MARKET SUPPLY BUILDING139 SE Taylor St

Portland, OR 97214

$5,500,000-

39,000 SF-

$141 PSF-

0.44 AC-

ZONED: EXD

$3,400,000-

30,000 SF-

$113 PSF-

0.23 AC-

ZONED: IG1

PORTFOLIO

$8,900,000-

49,000 SF-

$182 PSF

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$5,500,000-

39,000 SF-

$141 PSF-

0.44 AC-

ZONED: EXD

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“Portland, Oregon is a designated Opportunity Zone, despite being one of the fastest-growth markets in the country.”

- Forbes Real Estate Council

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MR. FORMAL BUILDING

Address: 1205 SE Grand / 1206 SE MLKPortland, OR 97214 Market Assumptions:

GBA: 39,000 SF Market Rent – Main Level (19,000 SF) $28.00 NNN

NRA: 29,000 SF Market Rent – Second Level (10,000 SF) $28.00 NNN

Lot Size: 0.44 Acres

Zoning: EXD – Central Employment

Income After Redevelopment

Gross Rental Income $812,000

Vacancy Allowance ($40,600)

Est. Gross Income (EGI) $771,400

Operating Expenses (NNN)

Reserves ($0.20 psf) ($5,800)

Total Operating Expenses ($5,800)

Net Operating Income (NOI) $765,600

Terminal Cap Rate 6.03%

Exit Sales Price $12,700,000

Price Per Sq. Ft. $626

Redevelopment Analysis

Building/Tenant Improvements $140 psf ($4,060,000)

Leasing Commissions 5-YR / 5% ($192,850)

Contingency Costs 20% ($812,000)

Sum of Redevelopment Costs ($130) psf ($5,064,850)

AS IS Sale Price ($141) psf ($5,500,000)

Total Project Cost ($271) psf ($10,564,850)

Exit Sales Price $326 psf $12,700,000

Exit Sales Commission 2.0% ($254,000)

Net Proceeds from Sale $319 psf $12,446,000

Net Profit from Project 18% $1,881,150

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SUMMARY

Address 1205 SE Grand / 1206 SE MLKPortland, OR 97214

Year Built 1927 / 1912

Gross Buildable Area 39,000 SF

Space Occupied by User 29,000 SF

Lot Size 0.44 Acres

Zoning EXD – Central Employment

OWNER/USER ANALYSIS

Sale Price $5,500,000 $141.00

Down Payment $825,000 $21.15

Tenant Improvement Cost $4,060,000 $140.00

Total Acquisition Cost $4,885,000 $161.15

ANNUAL EXPENSES

Annual Mortgage Debt Service ($323,440) ($8.29)

Cost of TI’s Amortized / 10 Years ($406,000) ($10.41)

Cost of Down Payment Amortized / 10 Years ($82,500) ($2.12)

Total Owner Annual Expenses / NNN ($811,940) ($20.82) NNN

FINANCING TERMS

Down Payment $825,000 (15%)

Loan Amount $4,675,000

Loan to Value 85%

Interest Rate 4.75%

Amortization 25 Years

Monthly Payment ($26,653)

Term 7 Years

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– C E I D M A P –

N e w D e v e l o p m e n t

A n n o u n c e d

E a r l y A s s i s t a n c e

D e s i g n R e v i e w

P e r m i t R e v i e w

U n d e r C o n s t r u c t i o n

C o m p l e t e d P r o j e c t s

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A n n o u n c e d

ODOT Blocks - SE Water Ave / 3 City Blocks

Redevelopment of the 3 blocks site on SE Water Ave

NIR Center - 920 Southeast Stark Street

New biotech campus with 2 connected buildings of 10 stories each for a total of 347,000 SF.

E a r l y A s s i s t a n c e

66 SE Madison St

New 2-story, 16,000 SF catering kitchen facility, an enclosed parking garage for about 13 cars on the ground floor

110 SE Main St

Proposal is the renovation of existing single-story concrete building for industrial office and retail sales/service tenants

210-226 SE Madison St

Project is a renovation of two buildings: 210 SE Madison Street and 226 SE Madison Street

1120 SE Main St

Total development to contain 72 apartments, 66,000 SF manufacturing and production, and 94 parking spaces

1006 SE Grand Ave

Project to include renovation of existing building and construction of a new multi-family on parking lot portion, land division is likely – with a shared access to parking with the existing curb cuts on SE Grand

Weatherly Building - 510 SE Morrison St

New office building and seismic retrofit of the Weatherly Building

L a n d / U s e R e v i e w

550 SE MLK

New mixed-use building development on this site with two options for height (8 and 7-stories) and 2 versions of parking (with and without a basement)

Modera Morrison - 1120 SE Morrison St

7-story market rate apartment building with 247 units, ground floor retail, and basement parking

U n d e r C o n s t r u c t i o n

7 Southeast Stark

New core and shell development of 5-story CIP concrete slabs and columns, 5-story steel frame with composite steel floor decks, mixed-use with ground floor industrial service, 6 floors of commercial parking and 4 floors of industrial and traditional office

District Office - 525 SE MLK

New construction of 6-story (above ground) building consisting of 90,400 SF with one level of underground parking consisting of 15,490 SF; 5 levels of office over ground floor retail, CLT floor system

Chamberlain Hotel – 509 SE Grand Ave

Change of occupancy from M to A-2 on ground floor. Seismic retrofit and major remodel to entire building including new storefront, entries, canopies, elevator, egress stairs, roof, stormwater facilities and demising walls

Tree Farm – 826 SE 3rd Ave

New 6-story commercial building with associated site work; 1st floor future retail tenant, lobby and trash room; floors 2 through 6 to accommodate F2 occupancy

Grand Belmont – 514 SE Belmont St

New 7-story mixed-use building, Type I construction and 5 stories of Type IIIA construction; level 1 commercial spaces and parking; level 2 through 7 for 131 residential units

Modera Buckman – 909 SE 12th Ave

Request for approval of a Type III design review to allow construction of a development of a 7-story mixed-use building with three modificatons to review

P e r m i t R e v i e w

129 SE Alder St / 110 SE Washington St

Demo existing 2-story warehouse and construct a new 9-story building with underground parking

808 SE Alder St

Full building renovation, change of use and occupancy; addition of 3rd story plus full seismic upgrade

Alder.9: 820 SE Alder St

9-story retail and multi-dwelling residential mixed-use building in the Central Eastside Subdistrict of the Central City Plan District. The proposal includes 176 apartments in the upper stories and approximately 5,350 SF of retail on the ground floor along SE Morrison St and SE 9th Ave

C o m p l e t e d P r o j e c t s

811 Stark – 811 SE Stark St

New 31,500 SF mixed-use building with retail space on the 1st floor, and an expected mix of creative office uses on the upper floors

Plow Works Building – 105 SE Taylor St

Conversion of furniture warehouse into Retail with restaurant, showroom and production space. Plaza de Toro restaurant to occupy ground floor

Modera Belmont – 685 SE Belmont St

6-story, mixed-use building by SERA Architects

Little LOCA – 915 SE Belmont St

6-story mixed-use building by Ankrom Moisan Architects

Goat Blocks – 1036 SE Belmont St

Mixed-use development with 97,000 SF of retail space and 247 apartments

The Redd on Salmon – 831 SE Salmon St

Major renovation of and addition to existing building. New 2nd floor addition and new 2nd floor mezzanines

Custom Blocks – 1340 SE 9th Ave

Core and shell improvements for industrial use; seismic upgrades, new roofing, thermal envelope, plumbing and parking lot improvements

Matterhorn Building – 940 SE Madison St

Demolition of interior structures and construction of 5 new tenant spaces for commercial food kitchens

Waterman Building – 80 SE Madison St

Conversion of existing warehouse into industrial office building including seismic upgrade

Pitman II – 1430 SE Water Ave

Conversion of existing warehouse into production kitchens on first floor with offices above by DECA Architects

1510 Technology Center – 1510 SE Water Ave

Conversion of existing building into offices for Viewpoint Construction Software

120 SE Clay St

New 3-story office building with basement level parking, rooftop deck and green roof.

Clay Creative – 240 SE Clay St

New industrial office building with structured parking at lower level

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1205 SE Grand / 1206 SE MLK, PORTLAND, OR, 97214

Marcus & Millichap has been selected to exclusively market for sale the Mr. Formal Building, an urban-infill,

retail and industrial property located in Portland, Oregon. The two buildings were built in 1927 and 1912

respectively and consist of approximately a combined total of 39,000 square feet of gross leasable area

situated on a 0.44-acre parcel of land. Both parcels are zoned EXD – Central Employment, which allows for a

variety of uses including, but not limited to retail, office and multi-family.

Opportunity Zones were created as a result of the 2017 Tax Cut and Jobs Act, and they are designed to

encourage private investment generally in certain areas of the country through deferral of capital gains taxes.

To benefit from the program, one has to make capital improvements into an asset equal to the basis of the

property less the land value and then retain ownership of that asset for up to 10 years. A large majority of

Portland’s Central Business District has been designated an Opportunity Zone including the location of the

Subject Property. Moreover, the Oregon tax code automatically mirrors the federal one, so Oregon is

effectively offering the same Opportunity Zone discount to investors a second time on Oregon tax bills.

“Oregon has the best quality Opportunity Zones of any state in the country. OZ designations were

based on 2010 census data. Oregon areas ripe for economic development at that time included

much of downtown Portland, the Pearl District, close-in Eastside...”

- Portland Business Journal

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1206 SE MLK BLVD

GBA: 30,000 SF // Lot: 0.23 AC

Second Level: 10,000 SFMain Level: 10,000 SFLower Level: 10,000 SF

1205 SE GRAND AVE

GBA: 9,000 SF // Lot: 0.21 AC

Main Level: 9,000 SF

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(SUBJECT)

Madison Suites

Cline Glass Building

Expert Auto Building

66 SE Madison

Kennedy Restoration

302 SE 7th Ave

Portland Store Fixtures

Clay Creative

1420 SE Water Ave

The Glass Lab

Khanate Furniture

Custom Blocks

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Avg. $176 PSF

$0.00

$30.00

$60.00

$90.00

$120.00

$150.00

$180.00

$210.00

$240.00

$270.00

$300.00

139 SE

Taylor

Madison

Suites

Cline Glass

Building

Expert Auto

Building

66 SE

Madison

Kennedy

Restoration

302 SE 7th

Ave

Portland

Store

Fixtures

Clay

Creative

1420 SE

Water Ave

The Glass

Lab

Khanate

Furniture

Custom

Blocks

Average Price Per Square Foot

SubjectProperty

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Close Of Escrow: 8/13/2019

Sales Price: $1,840,000

Price/SF: $204

Zoning: EXD - OPZ

CLINE GLASS BUILDING1125-1135 SE Grand Ave, Portland, OR, 97214



Price/SF: $124

Zoning: IG1 - OPZ

MADISON SUITES210-226 SE Madison St, Portland, OR 97214

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Sales Price: $820,800

Price/SF: $200

Zoning: EXD

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EXPERT AUTO BUILDING1525 SE MLK Jr Blvd, Portland, OR 97214

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Price/SF: $181

Zoning: IG1 OPZ

KENNEDY RESTORATION BUILDING323 SE 7th Ave, Portland, OR, 97214



Price/SF: $200

Zoning: IG1 – OPZ

66 SE MADISON ST66 SE Madison, Portland, OR, 97214

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Price/SF: $200.00

Zoning: IG1 - OPZ

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302 SE 7TH AVE302 SE 7th Ave, Portland, OR, 97214

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Price/SF: $193

Zoning: IG1

CLAY CREATIVE BUILDINGS633 SE Clay St, Portland, OR, 97214



Price/SF: $236

Zoning: IG1 - OPZ

PORTLAND STORE FIXTURES110 SE Main St, Portland, OR, 97214

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Price/SF: $184

Zoning: IG1 - OPZ

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1420 SE WATER AVE1420 SE Water Ave, Portland, OR, 97214

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Price/SF: $114

Zoning: EXD

KHANATE FURNITURE BUILDING716 SE Grand Ave, Portland, OR, 97214



Price/SF: $137

Zoning: IG1

THE GLASS LAB350 SE Mill St, Portland, OR, 97214

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Price/SF: $130

Zoning: IG1

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THE CUSTOM BLOCKS1306-1340 SE 9th Ave, Portland, OR 97214

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(SUBJECT)

The Glass Lab

The Grand

Red East Center

The Custom Blocks

The Creamery

Matterhorn Building

East Bank Lofts

Plow Works Building

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$28.66 NNN

$0

$3

$6

$10

$13

$16

$19

$22

$26

$29

$32

MLK/Grand The Glass

Lab

The Grand Red East

Center

Custom

Blocks

The

Creamery

Matterhorn

Building

East Bank

Lofts

Plow Works

Building

SubjectProperty

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THE GLASS LAB350 SE Mill St, Portland, OR 97214

Lease Rates @ $26.50 NNN

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THE GRAND714 SE Grand Ave, Portland, OR 97214


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THE CUSTOM BLOCKS1306-1340 SE 9th Ave, Portland, OR 97214


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RED EAST CENTER537 SE Ash St, Portland, OR 97214


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EAST BANK LOFTSPortland, OR 97214

For Lease @ $29.00 NNN

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THE CREAMERY240 SE 2nd Ave, Portland, OR 97214


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PLOW WORKS BUILDING105-117 SE Taylor St, Portland, OR 97214


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MATTERHORN BUILDING940 SE Madison St, Portland, OR 97214

For Lease @ $30.00 NNN

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